HUD Baltimore Field Office to Close, Along with Many Other HUD Field & Regional Offices

 

The Baltimore field office of the Department of Housing and Urban Development (HUD) will soon be permanently closed, along with many other HUD field offices. The downtown Baltimore office, which employs about 90, is to be shut down. All who work there will likely be terminated by order of the U.S. Department of Government Efficiency. The closure is part of HUD's reduction of regional and field offices.

Eliminating the Baltimore office and transferring cases to other FHA offices will mean it will take longer to receive approvals and resolve issues between the loan originator and the agency. Boston or New York are already swamped with servicing the loans. HUD construction analysts, appraisers, underwriters, and, most importantly, asset management who know the market here are all going to be eliminated. It is going to make it much more difficult to finance and monitor housing.

The biggest impact will be a severe slowdown in processing Federal Housing Administration (FHA) loans for multi-family projects, one of the Baltimore office’s major functions. An observer commented, “It doesn’t make any sense to do this in the name of saving money. They finance anything from affordable- to market-rate projects, and they also asset manage them. They actually make money – billions – for the federal government that gets put back into the general fund.” Created by President Franklin Delano Roosevelt during the Great Depression under the authority of the National Housing Act of 1934, the FHA is one of the main government agencies that offers low down payment mortgages for qualifying homebuyers.

Other functions of the Baltimore office include Community Planning and Development (CPD), which administers local grants to promote better housing and expanded economic opportunities to low and moderate income persons, and enforcement of the Fair Housing Act, which prohibits discrimination in housing-related activities. Another loss from the shutdown of the field office will be oversight of Section 8 and voucher housing and local public housing authorities. Because this office administers the money to public housing authorities and keeps a watch over those funds, there will be more opportunity for fraud.

Responding after publication, the HUD Public Affairs Office said “no decisions have been finalized.”

Read the March 5, 2025 BaltimoreBrew article.

Read the March 5, 2025 Bloomberg article.

Evaluation of 50 Years of Exclusionary Zoning Litigation

 

Robert G. Schwemm has published in the UIC Law Review - (37:3): 390-456 - an historical review of the Arlington Heights cases and the ongoing legal barriers to address metropolitan segregation through zoning litigation. See “Reflections on Arlington Heights: Fifty Years of Exclusionary Zoning Litigation and Beyond.”

Schwemm is the Ashland-Spears Distinguished Research Professor of Law and William L. Matthews, Jr. Professor of Law at the College of Law, University of Kentucky. He also is author of the encyclopedic standard Housing Discrimination: Law and Litigation (West Group, 2001 and updated annually by Clark Boardman Callaghan).

Arlington Heights (Illinois) was an exclusionary zoning case, one of many such cases brought in the 1970s that challenged local land-use practices blocking subsidized housing projects for racial minorities who were underrepresented in the area. Passage of the FHA in 1968 stimulated more of this type of litigation. Since then, many exclusionary zoning cases have been filed, and, as the Supreme Court noted in 2015, they make up the basis of this type of FHA claim. Arlington Heights is the most important of these cases. 

In the 50 years since the case, the Village of Arlington Heights has become a more diverse and welcoming community that recently elects Democratic candidates. But residents of these type of "high-opportunity" communities have generally continued to oppose any subsidized housing projects. Exclusionary zoning remains a battleground today, as occasional FHA-based actions generally have failed - and continue to fail - to overcome more powerful social and economic forces that encourage affluent suburbs to use zoning to exclude affordable housing. 

There have been positive developments since the Arlington Heights case that could influence future desegregation. The link between where you live and your financial, social, and medical life chances has been solidly established by much research. Also, bans on “source-of-income” discrimination have been added to many state and local fair housing laws that the majority of Americans now live in jurisdictions with such a ban. Though mainly designed to guarantee voucher-holders access to more rental opportunities, these source-of-income laws have also been used to challenge exclusionary zoning.

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Source: April edition of Poverty & Race by the Poverty & Race Research Action Council 

(PRRAC).

 Appraisal Discrimination

HUD Actions Confront Bias in the Home Appraisal Process for People Seeking FHA Financing

HUD is creating a process that people seeking FHA financing can use to request a review of their appraisal if they believe the results may have been skewed by racial bias. For example, a homeowner who is in the process of refinancing their home with an FHA-insured mortgage can take steps to ensure that their appraisal is fair.

The proposed change indicates what lenders must follow when a borrower requests a Reconsideration of Value (ROV) review if concerns arise around unlawful discrimination in residential property valuations. Under the Reconsideration of Valuation proposal, lenders are given guidance regarding how to review requests from borrowers for a reconsider of value for the appraisal conducted in conjunction with their application for FHA-insured mortgage financing. It also provides guidance for obtaining a second appraisal when material deficiencies are documented, and the appraiser is unwilling to resolve them. Material deficiencies include when a Fair Housing violation has occurred, or bias has been identified on a property valuation report.

FHA is committed to eliminating bias in residential valuations and is taking multiple actions to enhance information, process, and documentation requirements related to this important issue. FHA is asking for stakeholder feedback to identify barriers and impediments that the draft ROV process may impose on the lending process. Any interested party is welcome to provide input. Stakeholders are encouraged to provide feedback on the Draft ML by emailing the Feedback Response Worksheet located in the Drafting Table to the FHA at sffeedback@hud.gov. The feedback period is open from January 3, 2023, to February 2, 2023.

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Source: Read the January 12, 2023 HUD release.

A federally-commissioned report from the National Fair Housing Alliance identifies recommendations to address racial discrimination in home appraisals.